Our last post reviewed the 5 Key Community Economic Benefits of a 170 Bargain Sale. Now let’s review the 3 Key Seller Benefits of a 170 Bargain Sale.



1. Receive Cash – A 170 Bargain Sale allows for the purchase price to be a mixture of cash and tax deduction that has the potential for Sellers to receive a higher net cash value than they would in a traditional sale. There are no minimum nor maximum cash amounts that have to be met to comply with the IRS Code. This makes the 170 Bargain Sale work equally well for Sellers with high tax liabilities as well as those with lower tax liabilities who would prefer the majority of the purchase price in cash.



2. Charitable Deduction – The second portion of the purchase price in a 170 Bargain Sale is tax savings in the form of a charitable tax deduction. This is calculated by taking the full fair market value of the asset minus the cash portion of the purchase price. The charitable tax deductions can be used the year in which the 170 Bargain Sale was completed plus an additional 5 years.



3. Satisfaction and Fulfillment – The 170 Bargain Sale offers Sellers the ability to do well while also creating change within local communities by helping to raise funds for non-profits.



These are the general benefits that all Sellers receive when completing a 170 Bargain Sale. There are some many other benefits that apply depending on the individual transaction and the specific Seller that they are difficult to quantify.



These include helping to reduce capital gains on a real estate investment when selling instead of deferring them by completing a 1031 Exchange and creating a huge positive impact on sale leaseback transactions.



We will be covering these additional Seller benefits in later blog posts as well as our email updates. Please fill out the contact form to learn more now or to sign up for our email list.



A real estate owner choosing to donate a piece of real estate or a portion of their real estate to a non-profit or sell it to a non-profit through a 170 Bargain Sale creates benefits for both the owner and the non-profit.



The real estate owner receives cash plus a charitable tax deduction that may provide them a higher net benefit than a traditional sale while the non-profit is able to acquire real estate at a lower basis than in a traditional sale. This allows them to put their savings from the purchase directly toward their cause, create ongoing cash flow by leasing the real estate out, and/or creating a large cash infusion upon the resale of the real estate asset to be put toward their charitable cause.

Did you know that there is a 3rd beneficiary in most cases as well?



170 Bargain Sales can also provide a huge benefit to the community in which the real estate is located. They benefit through:



• Revitalization – The 170 Bargain Sale can help increase the value of underutilized real estate. This increases the property taxes paid to the local authorities helping to provide additional funds for local schools and other governmental programs.
• Attract New Investors – As real estate changes hands during a 170 Bargain Sale, smaller businesses or investors may utilize facilities that were once financially out of reach allowing them to grow their businesses.
• Job Creation – New investors and businesses in the community create a need for new employees allowing local citizens to become gainfully employed and contribute to the local economy.
• Reduced Public Assistance – With more citizens gainfully employed from the creation of new businesses, money spent on public assistance decreases.
• Philanthropy – Non-profit organizations can improve their works by moving into a larger facility at a reduced price or from the funds raised from the sale of the real estate.



Our acquisition agents at The SIRE Group love working with non-profits, real estate brokers, and real estate owners to find a solution that provides an equitable benefit to all parties involved on NNN assets, hotels, multi-family, etc. Seeing that ripple through a community afterwards is just the icing on the cake.





Transaction Highlights

• Former Famous Dave’s restaurant with strong location on an outparcel of a busy mall.
• Strong store sales within mall and from surrounding restaurants.
• Seller’s received a large cash payment in addition to a tax deduction.
• The net cash benefit to the seller was equal to if not better than what they would receive in a traditional sale.
• Seller has the option to do a 1031 Exchange with the cash portion of the purchase price.
• The non-profit buyer plans to use the asset to raise funds for their cause of providing therapy, housing, and business skills training to kids aging out of the foster care system.
• Seller did well while helping a non-profit increase their social impact.
• Transaction was brokered by Erik Carlson (650-575-7475/erik.carlson@sirecre.com)



Click the button to learn more about the 170 Bargain Sale and how it can work for your NNN assets.





Transaction Highlights

• Walgreens with 5 years left on the initial lease term.

• Strong store sales on an Absolute NNN location.
• Sellers received a large cash payment in addition to a tax deduction whose combined estimated net cash benefit is $2,997,000 or 6.39% cap rate.
• The net cash benefit to the seller was equal to if not better than what they would receive in a traditional sale.
• Seller has the option to do a 1031 Exchange with the cash portion of the purchase price.
• The non-profit buyer plans to use the asset to raise funds for their cause of providing therapy, housing, and business skills training to kids aging out of the foster care system.
• Seller did well while helping a non-profit increase their social impact.



Click the button to learn more about the 170 Bargain Sale and how it can work for your NNN assets.